ASynopticGuide

To

UnionBudgetofIndia2017

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Foreword

ThisisthefourthbudgetandthirdfullyearbudgetbytheNDAGovernment.Itwaspresentedamidstveryhighexpectationsofannouncementofbigbangreformsinthemultiplesectorsbyagovernment,whichisnotonlyconsideredasGovernmentofReformsbutalsowhichenjoysunprecedentedmajorityinthelowerhouseofparliament.ThisunionbudgetwasmuchawaitedbytheindustryandthewholeofIndiaincludingtheoverseasstakeholdersinthelightofkeyeconomicdevelopmentsofthecurrentyear like Model GST law and demonetization. The Finance Minister delivered a balanced budget,howeveritwasnotimpressive.TheGDPgrowthof6.75%‐7.5%andfiscaldeficitof3.2%looksabitofambitious.Thedirecttaxandindirecttaxreformsarejustaverage.Theindustryandthekeysectorsareyettounderstandandarriveatconclusivedecisionabouttheimpactofbudget.Weleaveittothereaderstojudgeandanalyzethebudgetfromtheirviewpoint.Wehaveendeavoredtofairlybringalltheaspectsofthebudgetinthiswriteupwhichwillhelpyoutoanalyzetheproposalsofthegovernment.

The agenda of the budget was based on 10 pillars: Farmer, Rural Population, Youth, Poor andUnprivileged,Infrastructure,FinancialSector,DigitalEconomy,PublicServices,FiscalManagementandTaxAdministration.

Highlights

S.N.

Themes KeyPoints

1.Farmers

FarmercreditfixedatrecordlevelofRs. 1,000crore;willensureadequateflowtounderservedareas.

Soilhealthcards:Govt.tosetupmini‐labsinKrishiVigyanKendras. Long‐termirrigationfundinNABARD—corpusatRs.40,000crore. Modellawoncontractfarmingtobecirculated. DairyprocessinginfrafundwithcorpusofRs.8,000crore. Dedicatedmicro‐irrigationfundwithRs.5,000crorecorpus.

2.RuralPopulation

MissionAntyodayatobring1crorehouseholdsforpoor. MGNREGA:Rs.48,000crorehasbeenallocated;participationofwomennow

at55%;usingspacetechnologyinabigway PrimeMinister Gram Sadak Yojana: Rs. 19,000 crore allocated; alongwith

states,Rs.27,000crorewillbespentinFY18 PradhanMantriAwasYojana:Rs.23,000croreallocated 100%villageelectrificationbyMay2018 Rurallivelihoodmission:Rs.4,500croreallocated Masontrainingtobeprovidedfor5lakhpeople PanchayatRaj:Humanresourcereformprogrammetobelaunched Rs.187,223croreallocatedforruralprogrammes

3.Youth Education: System of measuring annual learning outcomes, emphasis on

science Innovationfundforsecondaryeducation ReformsinUGC:Collegestobeidentifiedbasedonrankingandgivenmore

autonomy

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S.N.

Themes KeyPoints

ProposetoleverageinformationtechnologywithlaunchofSWAYAMplatformforvirtuallearning

National testingagencytobeestablished forallentranceexams, freeingupCBSE,AICTEandotherbodies

100Indianinternationalskillcentrestobeestablishedwithcoursesinforeignlanguages

Rs.4,000croreallocatedtolaunchskillacquisitionandknowledgeawareness Specialschemeforcreatingemploymentinleather/footwearsector Tourism:Fivespecialzonestobesetup

4.Poor andUn‐privileged

Women:MahilaShaktiKendraswithRs.500crorecorpus SteppedupallocationtoRs.184croresforvariousschemesforwomenand

children Affordablehousingtobegiveninfrastructurestatus Actionplan toeliminate leprosyby2018,TBby2025, reduce IMRto29 in

2019 TocreateadditionalPGmedicalseatsperannum TwonewAIIMSinJharkhandandGujarat Newrulestobeintroducedformedicaldevices Labourrights:Legislativereformstosimplifyandamalgamateexistinglabour

laws Allocation toSCs increased toRs.52,393crore;STsgivenRs.31,920crore,

minorityaffairsallocatedRs.4,195crore Seniorcitizens:Aadhaar‐basedsmartcardswithhealthdetailstobeprovided

5.Infrastructure

TotalcapexanddevelopmentexpenditureofrailwayspeggedatRs.131crore Railways: Passenger safety—Safety fund corpus set up; unmanned level

crossingstobeeliminatedby2020 Railwaylinesof3,500kmtobecommissioned Tolaunchdedicatedtourism/pilgrimagetrains 500stationstobemadedifferently‐abledfriendly Cleanlinessinrailways:TointroduceCoachMitrafacility;By2019,bio‐toilets

forallcoaches Railways to offer competitive ticket‐booking facility; service charge

withdrawnforticketsbookedonIRCTC Newmetrorailpolicytobeannounced Roadssector:AllocationfornationalhighwaysatRs.64,000crore AirportsAuthorityofIndiaActtobeamendedtoenablemonetizationofland

resources TotalallocationtotransportsectoratRs.200crore Telecomsector:AllocationtoBharatNetprogrammeatRs.10,000crore Digi‐Gaoninitiativetobelaunched TomakeIndiaglobalhubforelectronicsmanufacturers Exportinfra:Newrestructuredcentralschemetobelaunched Totalallocationforinfrastructure:Rs.396crore

6.FinancialSector

ForeignInvestmentPromotionBoard(FIPB)tobeabolished

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S.N.

Themes KeyPoints

Commoditiesmarket:paneltostudylegalframeworkforspotandderivativemarkets

Resolutionmechanismforfinancialfirms Cyber‐security:Computeremergencyresponseteamtobesetup ListingofPSEswillfosterpublicaccountability;revisedmechanismfortime‐

boundlisting To create integratedpublic sector oilmajor (bymerging various oil sector

entities) NewETFtobelaunched PradhanMantriMudraYojana:LendingtargetatRs.244crore Stand‐upIndiascheme:over16,000newenterpriseshavebeensetup

7.DigitalEconomy

Indiaatcuspofmassivedigitalrevolution Govtto launchtwonewschemestopromoteBHIMapp, includingcashback

schemeformerchants AadhaarPaytobelaunchedforpeoplewhodon’thavemobilephones Focusonruralandsemi‐urbanareas Tostrengthenfinancialinclusionfund Panelondigitalpaymentshasrecommendedstructuralreforms TocreatepaymentregulatoryboardatRBI

8.PublicServices

Touseheadpost‐officeforpassportservices Defence:centralizeddefencetravelsystemdeveloped Defence:Centralizedpensiondistributionsystemtobeestablished Govtrecruitment:Tointroducetwo‐tierexamsystem Govtlookstointroducelawstoconfiscateassetsofeconomicdefaulters High‐level panel chaired by PM to commemorateMahatmaGandhi’s 150th

birthanniversary

9.FiscalManagement

Totalbudgetexpenditure:Rs.210 crore Rs.3,000croretoimplementvariousbudgetannouncements Defenceexpenditureexcludingpensions:Rs.274crore Consolidatedoutcomebudgetforallministriesbeingcreated FiscaldeficitforFY18peggedat3.2%ofGDP RevenuedeficitforFY18at1.9%

10.

TaxAdministration

Directtaxcollectionnotcommensuratewithincome/expenditurepatternofIndia.

Wearelargelyataxnon‐compliantsociety,predominanceofcashinsocietyenablestaxevasion

Afterdemonetization,datareceivedwillincreasetaxnet Blackmoney:NocashtransactionsaboveRs.3lakh. Transparency in political funding: Parties continue to receive anonymous

donations;proposesystemofcleaningup Politicalfunding:Maximumamountofcashdonationthatcanbereceivedis

Rs 2,000; political parties can receive donations by cheques or digitally;amendmentproposedtoRBIActtoissueelectoralbonds;everypartyhastofilereturnswithinspecifiedtime

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S.N.

Themes KeyPoints

Personalincometax:Ratereducedto5%forincomebracketofRs.2.5‐5lakh;AllothercategoriestogetuniformbenefitofRs.12,500perperson;to levysurchargeonincomebracketRs.50lakh–Rs.1crore

Personalincometax:Tohavesimpleone‐pageformfortaxableincomeuptoRs5lakh

GST:preparednessofITsystemonschedule NotmanychangestoexcisedutiessinceGSTwillbeimplementedsoon FPIcategory1and2investorsexemptedfromindirecttransferprovisions Timeperiodofrevisingtaxreturnsreducedto12months Realestate:tomakechangesincapitalgainstax Concessional withholding rate will be extended to 30 June 2020, rupee‐

denominatedmasalabondstobeincluded MATnottobeabolishedatpresent;toallowcarry‐forwardfor15years Corporate tax rate: MSMEs’ rate (annual turnover less than Rs. 50crore)

reducedto25% LNG:Reducecustomsdutyto2.5% LimitofcashdonationforcharitabletrustscuttoRs.2,000.

Commonmanexpectationsvsactual

Expectationsweretopresentastandoutbudgetthatwouldnotjustintroduceanumberofreforms,butalso provide a lot of income tax exemptions to give relief to the wider public in the wake of theinconveniencecausedbyCentre’sde‐monetizationdrive.

ExpectationswerealsorifethattherewouldbeamajorannouncementonindirecttaxestoototakealotofweightoffthebeleagueredcorporateIndia’sshouldersandbringinmeasurestoeasetheconductofbusinessinIndia.

Letusseetheactualsagainsttheexpectations.AmeretaxreliefofRs.12,500acrosstheboard.TheFinanceMinisterwouldhavewontheheartsandmindsofthemiddleclasshadhecompletelysparedfromincometaxthosewhoseincomeisnotmorethanRs.5lakh.Indeed,apersonearninguptoRs.40,000permonthdeserves to be left untouchedby income tax.We hope the FinanceMinisterwillconsiderthisinhisnextbudget.

TheebullientteamofExactitudeshallbepleasedtoassistyouinidentifyingandanalyzingtheimpactof Union Budget 2017 on your business. Please do not hesitate to contact us for any clarification/detailedimpactanalysisascustomizedtoyou.

Sincerely;

TeamExactitude

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Contents

1. EconomicIndicators................................................................................................................................6

1.1. GDPgrowth.............................................................................................................................................................6

1.2. WPIandCPIgrowth..........................................................................................................................................13

1.3 IIPgrowth..............................................................................................................................................................14

2. SectoralPerformance..........................................................................................................................17

2.1. Agriculture............................................................................................................................................................17

2.2. BankingandNBFCs...........................................................................................................................................18

2.3. Education...............................................................................................................................................................19

2.4. DigitalEconomy..................................................................................................................................................20

2.5. Infrastructure......................................................................................................................................................21

3. TaxProposals..........................................................................................................................................22

3.1. DirectTaxProposals.........................................................................................................................................22

3.2. IndirectTaxProposals.....................................................................................................................................27

AnnexureI:ChangesinIndirectTaxes....................................................................................................................29

AboutExactitudeAdvisors:..........................................................................................................................................37

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1. ECONOMICINDICATORS

Theeconomyperformedwellasexpectedandremainedemergingduringthefiscalyear.Thesummaryonperformanceofthevariouseconomicindicatorsfollows:

1.1. GDPGROWTH

TheGDPgrowthratewasprojectedtoremain inbetween7.0‐7.75percent intheEconomicSurvey2015‐16.However,therealGDPgrowthratewas7.2percentinthefirsthalfandbelow7.6inthesecondhalf.Thus,theprojectedtargetwasachievedduetothefollowingmainreasons:

1. Themodestpick‐upinagriculturalgrowthonthebackofimprovedmonsoon.

2. The long‐awaited start of an export recovery due to acceleration in demand in some advancedcountries.

3. Moderationinindustrialandnon‐governmentservicesectors.

4. The economy was buoyed by government consumption, as the 7th Pay Commission salaryrecommendationswereimplemented.

5. Downtrendintheinflationcharacterizedbytwodistinctindices‐ConsumerPriceIndex(CPI)andWholesale Price Index (WPI). The inflation has narrowed considerably and hovered around 4.5percentto5percentfortheyear.Theoutlookintheyeartocomewillcontinuetobebelow5%i.e.RBI’stargetwhichwilllikelybesupportedbydemonetizationmovebytheGovernment.

TheGlobal economy remaining sluggishduring the last year facing considerableuncertainty, in theaftermath of major economic and political developments. The International Monetary Fund (IMF)estimatesthatworldGDPwillgrowby3.1%in2016and3.4%in2017.Theadvancedeconomiesareexpectedtoincreasetheirgrowthfrom1.6%to1.9%andtheemergingeconomiesfrom4.1%to4.5%.Anumberofemergingeconomiesaroundtheglobeisexpectedtorecoverin2017ascomparedto2016.Inthisracearoundtheworld,Indiaseemstobeplacedbetterandoneofthefastestgrowingeconomy.TheFinanceMinistryhasobservedIndianEconomytobeabrightspotintheWorldEconomy.

SectoralgrowthsinGDPinIndia

TheaveragesectorialGVAbysectoris:

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a. AgricultureAgriculture comprises of crops including fruits and vegetables and allied sectors consisting oflivestockproducts,forestryandfisheries.Thegrowthofagriculture&alliedsectorsimprovedsignificantlyin2016‐17,followingthenormalmonsooninthecurrentyearwhichwasprecededbysub‐parmonsoonrainfallin2014‐15and2015‐16.Highergrowthinagriculturesectorin2016‐17isattestedbythefirstadvanceestimatesofthekharifcropproductionfortheyear.

Exactitudeannotations:

AgriculturehasalwaysbeenanimportantsectorinthecontextofIndianeconomyasmajorofthepopulationaredependentonthissector.Thissectorhasbeensluggishovertheyearsbecauseofthehighdependencyonthetraditionalmethodsandnaturalmonsoons.

Adequate measures like the improvement in the farming methods, related development ofawarenessinthefarmers,irrigationfacilitiesetc.shouldbetakenbytheGovernmenttoincreasethe produce. The increase in population is not being counterbalanced by the increase in theagriculturalproducewhichisaserioussignoffooddeficit.

Insuchasituation,theGovernmentshouldannouncecertainpoliciesonthissectorinthebudgetlike:

1. Incentivestothefarmerslikeloansatconcessionalrates

2. Awarenessprogramsforthemodernfarmingtechniques

3. Incentives to the corporate houses who want to invest in allied services related to theagriculturelikesettingupirrigationfacilities,storageoftheproduce,transportationoftheproduceetc.

Average Sectoral outputto total output

Agriculture and allied

Industry*

Services

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These are nominal measures that the Government of India should take in order to save theeconomy.

Let’sanalysehowtheFinanceMinisterhasaddressedthissectorinhisbudget2017.

“Farmers”wasthefirstagendainthebudgetspeechbyHon’bleFinanceMinister.Heremindedthatthegovernmentwasstrivedtodoubletheincomeofthefarmersin5years.Thebudget2017isthebudgetofruraldevelopmentincludingagriculture.

Thekeyproposalsinthebudgetrelatingtoagricultureare:

Thetargetforagriculturalcreditin2017‐18hasbeenfixedatarecordlevelofRs.10lakhcrore.

Benefitfrom60days’interestwaiverannouncedbyHon’blePrimeMinisterinrespectoftheirloansfromthecooperativecreditstructure.

SupporttoNABARDforcomputerizationandintegrationofall63,000functionalPrimaryAgriculture Credit Societies (PACS) with the Core Banking System of District CentralCooperativeBanks.Thiswillbedonein3yearsatanestimatedcostofRs.1,900crore,with financialparticipation fromStateGovernments.Thiswillensureseamless flowofcredittosmallandmarginalfarmers.

The Fasal Bima Yojana launched by the Government is a major step towards theinsuranceofcrops.Thecoverageofthisschemewillbeincreasedfrom30%ofcroppedarea in2016‐17 to40% in2017‐18and50% in2018‐19.TheBudgetprovisionofRs.5,500croresforthisYojanain2016‐17wasincreasedtoRs.13,240croresin2016‐17tosettlethearrearclaims.For2017‐18,asumofRs.9,000croreshasbeenprovided.ThesuminsuredunderthisYojanahasmorethandoubledfromRs.69,000croresinKharif2015toRs.141,625croresinKharif2016.

ALongTermIrrigationFundalreadysetupinNABARDhasbeendoubledbyadditionof20,000croresbyHonorablePrimeMinistermakingthetotalcorpusofRs.40,000crores.

AdedicatedMicroIrrigationFundwillbesetupinNABARDtoachievethegoal‘perdropmorecrop’.TheFundwillhaveaninitialcorpusofRs.5,000crores.

Forthepost‐harvestphase,stepswillbetakentoenablefarmerstogetbetterpricesfortheirproduceinthemarkets.ThecoverageofNationalAgriculturalMarket(e‐NAM)willbeexpandedfromthecurrent250marketsto585APMCs.AssistanceuptoaceilingofRs.75lakhswillbeprovidedtoeverye‐NAMmarketforestablishmentofcleaning,gradingandpackagingfacilities.Thiswillleadtovalueadditionoffarmers’produce.

ADairyProcessingand InfrastructureDevelopmentFundwouldbesetup inNABARDwithacorpusofRs.8,000croreover3yearswhichwillprovideadditionalincomeforthefarmers.Initially,theFundwillstartwithacorpusofRs.2,000crores.

The above proposals shows the intention of the Government as farmer‐friendly andtowardssustainingthefoodsurplus.Theindustriesintotheirrigation,foodprocessing,microfinance,fruits,fertilizersetc.arelikelytogetadvantagesoftheseproposals.

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b. ServicesServiceSectorcomprisesofmorethanhalfoftheIndianEconomyandcontinuestoexpanditsshareintheeconomy.ThemajorgrowthinIndianeconomyascomparedtolastyearwascontributedbythissector.Asinthepreviousyears,theservicesectorcontinuedtobethedominantcontributortotheoverallgrowth of the economy, led by a significant pick‐up in public administration, defense & otherservicesthatwereboostedbythepayoutsoftheSeventhPayCommission.Consequently,thegrowthinservicesin2016‐17isestimatedtobeclosetowhatitwasin2015‐16.

Exactitudeannotations:

Service sector remains the back bone of the Indian Economy and ever increasing. The unionbudgetidentifiesthissectoraskeyforgrowthdriver.

Let’sanalysehowtheFinanceMinisterhasaddressedthissectorinhisbudget2017.

Thekeyproposalsinthebudgetrelatingtoserviceare:

Water:

Safedrinkingwatertoover28,000arsenicandfluorideaffectedhabitationsinthenextfouryears.ThiswillbeasubmissionoftheNationalRuralDrinkingWaterProgramme(NRDWP).

Educationandskills

Forimpartingnewskillstothepeopleintheruralareas,masontrainingwillbeprovidedto5lakhpersonsby2022,withanimmediatetargetoftrainingatleast20,000personsby2017‐18.

AnInnovationFundforSecondaryEducationwillbecreatedtoencouragelocalinnovationforensuringuniversalaccess,genderparityandqualityimprovement.ThiswillincludeICTenabledlearningtransformation.Thefocuswillbeon3479educationallybackwardblocks.

Reforms in the UGC. Good quality institutions would be enabled to have greateradministrativeandacademicautonomy.Collegeswillbeidentifiedbasedonaccreditationandranking,andgivenautonomousstatus.

LeverageinformationtechnologyandlaunchSWAYAMplatformwithatleast350onlinecourses.Thiswouldenable students tovirtually attend the courses taughtby thebestfaculty;accesshighqualityreadingresources;participateindiscussionforums;taketestsandearnacademicgrades.AccesstoSWAYAMwouldbewidenedbylinkagewithDTHchannels,dedicatedtoeducation.

EstablishaNationalTestingAgencyasanautonomousandself‐sustainedpremiertestingorganizationtoconductallentranceexaminationsforhighereducationinstitutions.Thiswould free CBSE, AICTE and other premier institutions from these administrativeresponsibilitiessothattheycanfocusmoreonacademics.

Housing

Affordablehousingwillnowbegiveninfrastructurestatus

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TheNationalHousingBankwill refinance individualhousing loansof aboutRs.20,000crorein2017‐18.Thankstothesurplusliquiditycreatedbyde‐monetization,theBankshavealreadystartedreducingtheirlendingrates,includingthoseforhousing.Inaddition,interestsubventionforhousingloanshasalsobeenannouncedbytheHonorablePrimeMinister.

Healthandsanitation

AnactionplantoeliminateKala‐AzarandFilariasisby2017,Leprosyby2018andMeaslesby2020.Eliminationoftuberculosisby2025isalsotargeted.

ActionplanhasbeenpreparedtoreduceIMRfrom39in2014to28by2019andMMRfrom167in2011‐13to100by2018‐2020.

1.5lakhHealthSubCenterswillbetransformedintoHealthandWellnessCenters.

Stepstocreateadditional5,000PostGraduateseatsperannum.Inaddition,stepswillbetakentorolloutDNBcoursesinbigDistrictHospitals;strengthenPGteachinginselectESI andMunicipal Corporation Hospitals; and encourage reputed Private Hospitals tostartDNBcourses.

Necessary steps for structural transformationof theRegulatory frameworkofMedicalEducationandPracticeinIndia.

TwonewAllIndiaInstitutesofMedicalScienceswillbesetupintheStatesofJharkhandandGujarat.

AmendmentintheDrugsandCosmeticsRulestoensureavailabilityofdrugsatreasonablepricesandpromoteuseofgenericmedicines.Newrulesforregulatingmedicaldeviceswill also be formulated. These rules will be internationally harmonised and attractinvestmentintothissector.Thiswillreducethecostofsuchdevices.

For senior citizens, Aadhar based Smart Cards containing their health details will beintroduced.Abeginningwillbemadethroughapilotin15districtsduring2017‐18.TheLIC will implement a scheme for senior citizens to provide assured pension, with aguaranteedreturnof8%perannumfor10years.

Tourism

Tourismisabigemploymentgeneratorandhasamultiplierimpactontheeconomy.FiveSpecialTourismZones,anchoredonSPVs,willbesetupinpartnershipwiththeStates.IncredibleIndia2.0Campaignwillbelaunchedacrosstheworld.

c. Industry

IndustrycomprisesofManufacturingandotherthreesegmentsi.e.(1)electricity,gas,watersupplyandrelatedutilities(2)Miningandquarryingand(3)Constructionactivities.After achievinga real growthof7.4per cent in termsofvalueadded in2015‐16, thegrowth inindustrialsector,comprisingmining&quarrying,manufacturing,electricity,gas&watersupply,and construction sectors moderated in 2016‐17. This is in tandem with the moderation in

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manufacturing,mostlyonaccountofasteepcontractionincapitalgoods,andconsumernon‐durablesegmentsofIndexofIndustrialProduction(IIP).Thecontractioninminingandquarryinglargelyreflectsslowdownintheproductionofcrudeoilandnaturalgas.However,theperformanceofindustrialsectorintermsofvalueaddedcontinuedtobeatvariancewithitsachievementsbasedonIIP.Theongoingmanufacturingrecovery inthecurrentyear isaidedbyrobustgrowthinpetroleumrefining, automobiles,wearingapparels, chemicals, electricalmachineryandwoodproductsandfurniture.Apartfrommanufacturing,theotherthreesegmentsoftheindustrysector,i.e.electricity,gas,watersupply and related utilities, mining and quarrying and construction activities, are witnessing adecelerationingrowth.Exactitudeannotations:

Industry remains a critical force in both developing and advanced economies. This sectorpromotesinnovation,productivityandemployment.

Thissectormustbefurtherpromotedbythepolicymakerinamorecomprehensivemannerwiththe understanding of the diverse industry segments in a national or regional economy. Thechangingtrendsgiverisetoinnovationandultimatelyproduction.

Let’sanalysehowtheFinanceMinisterhasaddressedthisinhisbudget2017.

Railwaybudget

Forthefirsttime,therailwaybudgethasbeenclubbedwiththefiscalbudget.Thetotaloutlay on the railwaydevelopment and capexhas beenpegged atRs. 131,000 crores.Thesewillbeusedtobuildthenecessaryinfrastructureandensurethefollowing:

(i) PassengerSafety(ii)Capitalanddevelopmentworks

(iii)Cleanlinesand(iv)Financeandaccountingreforms.

Forpassengersafety,aRashtriyaRailSanrakshaKoshwillbecreatedwithacorpusofRs.1 lakhcroresover aperiodof5 years.Besides seedcapital from theGovernment, theRailwayswillarrangethebalanceresourcesfromtheirownrevenuesandothersources.Governmentwill laydown clear cut guidelines and timeline for implementing varioussafetyworkstobefundedfromthisKosh.UnmannedlevelcrossingsonBroadGaugelineswillbeeliminatedby2020.Expertinternationalassistancewillbeharnessedtoimprovesafetypreparednessandmaintenancepractices.

Railway linesof3,500kmswill be commissioned in2017‐18, as against2,800kms in2016‐17.Stepswillbetakentolaunchdedicatedtrainsfortourismandpilgrimage.

Abeginninghasbeenmadewithregardtostationredevelopment.Atleast25stationsareexpectedtobeawardedduring2017‐18forstationredevelopment.500stationswillbemadedifferentlyabledfriendlybyprovidingliftsandescalators.

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It is proposed to feed about 7,000 stations with solar power in the medium term. Abeginninghasalreadybeenmadein300stations.Workswillbetakenupfor2,000railwaystationsaspartof1000MWsolarmission.

Thefocusisonswachhrail.SMSbasedCleanMyCoachServicehasbeenstarted.Itisnowproposed to introduce ‘CoachMitra’ facility, a singlewindow interface, to register allcoachrelatedcomplaintsandrequirements.By2019,allcoachesofIndianRailwayswillbefittedwithbiotoilets.PilotplantsforenvironmentfriendlydisposalofsolidwasteandconversionofbiodegradablewastetoenergyarebeingsetupatNewDelhiandJaipurrailwaystations.Fivemoresuchsolidwastemanagementplantsarenowbeingtakenup.

Railwayswilloffercompetitiveticketbookingfacilitytothepublicatlarge.Servicechargeone‐ticketsbookedthroughIRCTChasbeenwithdrawn.Cashlessreservationshavegoneupfrom58%to68%.

Aspartofaccountingreforms,accrualbased financial statementswillbe rolledoutbyMarch2019.

Transportation

Forthissectorasawhole,includingrail,roads,shipping,theGovernmenthasprovidedRs.241,387croresin2017‐18.

Thisisahugeinvestmentthatwillspurahugeamountofeconomicactivityacrossthecountryandcreatemorejobopportunities.

Telecomandcommunications

Therecentspectrumauctionshaveremovedspectrumscarcityinthecountry.ThishasgivenamajorfilliptomobilebroadbandandDigitalIndiaforthebenefitofpeoplelivingin rural and remote areas. This has been a considerable achievement of the currentgovernment.

Under theBharatNetProject,Optical Fibrehasbeen laidon155,000kms.ThebudgetallocationforBharatNetProjecthasbeenextendedtoRs.10,000croresin2017‐18.Bytheendof2017‐18,highspeedbroadbandconnectivityonopticalfibrewillbeavailableinmorethan150,000grampanchayats,withwifihotspotsandaccesstodigitalservicesatlowtariffs.ADigi‐Gaoninitiativewillbelaunchedtoprovidetele‐medicine,educationandskillsthroughdigitaltechnology.

Energy

GovernmenthasdecidedtosetupStrategicCrudeOilReserves.Inthefirstphase,3suchReserves facilitieshavebeensetup.Nowin thesecondphase, it isproposedtosetupcavernsat2morelocations,namely,ChandikholeinOdishaandBikanerinRajasthan.Thiswilltakeourstrategicreservecapacityto15.33MMT.

ThefinanceministerhasproposedtotakeupthesecondphaseofSolarParkdevelopmentforadditional20,000MWcapacity.

Manufacturing

The government is committed to create an eco‐system tomake India a global hub forelectronicsmanufacturing.

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Over250investmentproposalsforelectronicsmanufacturinghavebeenreceivedinthelast2years,totalinganinvestmentofRs.1.26lakhcrores.

AnumberofgloballeadersandmobilemanufacturershavesetupproductionfacilitiesinIndia.IhavethereforeexponentiallyincreasedtheallocationforincentiveschemeslikeM‐SIPSandEDFtoRs.745croresin2017‐18.

1.2. WPIANDCPIGROWTH

TheinflationwasundercontrolasmeasuredbytheConsumerPriceIndex(CPI)andwholesalePriceIndex.TheaverageCPIinflationdeclinedto4.9percentin2015‐16from5.9percentin2014‐15.Itwas4.8per cent during April‐ December 2016. Inflation hardened during the first fewmonths of 2016‐17,mainlyduetoupwardpressureonthepricesofpulsesandvegetables.Itdippedtotwo‐yearlowof3.4percentinDecember2016asaresultoflowerprices,especiallyoffooditems.Theaverageinflationbasedonthewholesalepriceindex(WPI)declinedto(‐)2.5percentin2015‐16from2.0percentin2014‐15.Thedownwardtrend,howeverreversedduringthecurrentfinancialyearpartlydueto impactofrise inglobalcommoditypricesandpartlyowingtoadversebaseeffect.Theglobalcommodityandenergypriceshaveincreasedby18percentand23percentrespectivelyinthefirstelevenmonthsof2016asperIMFpriceindices.TheWPIinflationstoodat3.4percentinDecember2016andtheaverageinflationwas2.9percentduringApril‐December2016.ThemovementinCPIandWPIbasedinflationcanbeshowninthefollowingdiagram:

(Source:EconomicSurveypublishedbyMinistryofFinance)

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FoodInflationTheinflationinIndiacontinuestobedrivenbynarrowgroupoffooditems.a. Pulsescontinuedtobethemajorcontributoroffoodinflation.Thepricesofpulses,inparticularTur

andUrad,remainedhighduetoshortfallindomesticandglobalsupply.PostJuly2016,pulsespricesexceptGramDalpriceshavebeendecliningowingtonearnormalmonsoon,increaseintheRabipulsessowingandbufferbuildupbytheGovernment.

b. Sugar prices also firmed up on account of lower production and hardening of price in the

internationalmarket.

c. Vegetableprices,whichflaredduringtheleansummerseason,havealsodeclinedsharplyassupplypickedupduringthepostmonsoonandwinterseason.

TheCPIfoodinflation(CFPI)has,asaresult,dippedtoatwo‐yearlowof1.4percentinDecember2016.Theinflationforpulses&productsdippedtonegative1.6percentinDecember2016,andthevegetablesinflationremainednegativesinceSeptember2016.Thus, the food inflation controlled in the later of the year contributed a lot in checking the overallinflationrate.CPIbasedCoreInflationTheCPIbasedcoreinflationexclusiveoffoodandfuelgrouphasremainedstickyduringthisfiscalyearandremainedatanaverageof5%.Inflation for Pan, tobacco & intoxicants, Clothing & footwear, Housing and Education groupscontinuedtobeabove5percentandthemajorcontributorsofthecoreinflation.Inflationforthe‘Transport&communication’grouphasbeenrisinginrecentmonthspartlyreflectingriseinglobalcrudeoilpricesanditspass‐throughtodomesticpetrolanddieselprices.Priceofcrudeoil(Indianbasket)hasincreasedfrom$39.9inApril2016to$52.7inDecember2016.Likewise, comparatively higher Gold price in the international market this financial year hascontributedtowardsstickycoreinflation.

Alltheseproductsandproductgroupscombinedtogethermaintainedtheinflation.

1.3 IIPGROWTH

TheIndexofIndustrialProduction(IIP)providesquickestimatesoftheperformanceofkeyindustrialsectors.Thisindicatorsuggeststhattheperformanceofkeyindustrialsectorhasshownbelowaverageperformancewithsomesectorperformingwellandsomesectorperformingnegative.Let’shavealookatthebelowdiagramcomprisingoftheindexandbreak‐upofindexaccordingtothesectoranduse.

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2014‐15 2015‐16 April‐Nov.

2015‐16April‐Nov.2016‐17

Generalindex 2.8 2.4 3.8 0.4Sectorbasedclassification Mining 1.5 2.2 2.1 0.3Manufacturing 2.3 2 3.9 ‐0.3Electricity 8.4 5.7 4.6 5Use‐basedclassification Basicgoods 7 3.6 3.9 4.1CapitalGoods 6.4 ‐2.9 4.7 ‐18.9Intermediategoods 1.7 2.5 2 3.4Consumergoods ‐3.4 3 4.1 1.8Durables ‐12.6 11.3 11.8 6.9Non‐durables 2.8 ‐1.8 ‐0.5 ‐1.8

(Source:CSO)

As per CSO data, the industrial sector (which broadly comprises ofmining,manufacturing andelectricity)attained0.4percentgrowthduringApril‐November2016‐17ascomparedto3.8percentduringthesameperiodof2015‐16duetothehighergrowthingenerationofelectricity.Theminingandmanufacturingsectorshowedverymoderate.

In terms of use‐based classification, basic goods, intermediate goods and consumer durable goodsattainedmoderategrowth.Conversely,theproductionofcapitalgoodsdeclinedsteeplyandconsumernondurablegoodssectorssufferedamodestcontractionduringApril‐November2016‐17.

Let’shavealookatthecomparisonontheperformanceofvarioussectors(basedonuse).

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The eight core infrastructure supportive industries, coal, crude oil, natural gas, refinery products,fertilizers,steel,cementandelectricitythathaveatotalweightofnearly38percentintheIIP,registeredacumulativegrowthof4.9percentduringApril‐November2016‐17ascomparedto2.5percentduringApril‐November2015‐16.Month‐wiseperformanceoftheeightcoresectorsshowsthattheproductionofrefineryproducts,fertilizers,steel,electricityandcementhaveincreasedsubstantially,whilethatofcrudeoilandnaturalgashavefallen.Coalproductionattainedlowergrowthduringthesameperiod.

Most indicators of infrastructure related activities showed expansion during first half of 2016‐17.Thermalpowerwithagrowthof6.9percentboostedoverallpowergenerationwhilehydroandnuclearpowergenerationcontractedmarginallyduringApril‐September2016.

Exactitudeannotations:

TheperformanceofoverallIIPisbelowtheaverageandatverylowlevelascomparedtothelastyearwhichhadshownsomegoodsignsofrecoverydespitethevariationsintheperformanceofsomeofthemajorindustriesduringApril‐November2016.Theseindicatorsshowthenegativetrajectoryfortheperformancesandthegovernmentshouldtakethenecessarystepstoboosttheindustrialoutput.TheGovernmenthasprovidedvariousschemestoboosttheindustrialproductionlikeMake‐in‐India,InvestIndia,StartUpIndiaande‐bizMissionModeProjectundertheNationale‐GovernancePlan.However,theseschemesarenotworkingatparthewayitworkedthelastyear.

-20

-15

-10

-5

0

5

10

15

IIP Comparison (Use based)

April-Nov. 2015-16 April-Nov. 2016-17

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2. SECTORALPERFORMANCE

2.1. AGRICULTURE

The farmers,agriculture and ruralpopulation was thelimelight of theBudget 2017. Theindustryexpertshavealso termed thebudget as “Budget ofthe Rural Economy”.With the continuingthrust of Hon’bleFinance Minister ondoublingthe farmer’sincome by 2022, hehas taken severalpolicy decisions toboostthefarming.Withtheproposedincentives,thesectorisexpectedtogrowat4.1%.

WehavebroadlydiscussedthemajorproposalsgivenbytheFinanceBudget2017ontheAgriculturalSectorinSection1.1(a).

TheagriculturerelatedcompanieslistedonStockExchangeswelcomedthesebudgetproposalswithcheer.ThesecompaniesbelongtothecategoriesofIrrigation,Fertilizers,Seeds,rice,foodprocessingetc.Itisexpectedthattheseproposalswillprovidefurtherimpetustoboosttheruraldemand.

ExactitudeAnnotations:Theunionbudgethasaimedtogiveabigpushtoagriculturalreformsbyextendingthehugefarmcredit and offering the crop insurance much higher. National Bank for Agriculture and RuralDevelopment(NABARD),anapexruralbank,hasbeenentrustedwithmoreschemestofacilitatethesetupofnewdairysectorandirrigationfund.

However,thegovernmentmustensuretheseamlessflowofthecredittothefarmerstoachievetheresultsthefinanceministerwishedtospellout.

Also,asperthefinanceminister,amodellawoncontractfarmingwillbecirculatedamongstatestohelpfarmersgetbettervaluefortheirproduce.Additionally,hereiteratedthegovernment’searliergoalofbringinginmoreregulatedagriculturemarketsontheelectronicNationalAgricultureMarket(e‐NAM)platform.Thesekindofschemesshouldbeimplementedattheearliestbythegovernment,at the backdrop of impact of demonetizationwhich has resulted into the crash of the prices ofvegetables,fruitsandpulses.

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2.2. BANKINGANDNBFCS

The Government has alreadyundertaken substantivereforms in FDI policy in thelasttwoyears.Morethan90%of the total FDI inflows arenow through the automaticroute. The government feelsthatithasnowreachedastagewhereFIPBcanbephasedout.ThereforethegovernmenthasdecidedtoabolishtheFIPBin2017‐18. A roadmap for thesamewillbeannouncedinthe

next fewmonths. In the meantime, further liberalization of FDI policy is under consideration andnecessaryannouncementswillbemadeinduecourse.

Thereareotherreformsproposedbythefinanceministerinthefinancialsectorwhichcanbeevidencedbythebelowpoints:

In line with the ‘Indradhanush’ roadmap, the government has provided Rs. 10,000 crores forrecapitalisationofBanksin2017‐18.Additionalallocationwillbeprovided,asmayberequired.

Anexpertcommitteewillbeconstitutedtostudyandpromotecreationofanoperationalandlegalframeworktointegratespotmarketandderivativesmarketforcommoditiestrading.e‐NAMwouldbeanintegralpartofsuchframework.

Chit fundschemeshavebeenexploiting thepooranduneducatedpeople since long.There isanurgent need to protect the poor and gullible investors from another set of dubious schemes,operatedbyunscrupulousentitieswhoexploittheregulatorygapsintheMultiStateCooperativeSocietiesAct,2002.ThisActwillbeamendedinconsultationwithvariousstakeholders.

Thebillrelatingtoresolutionoffinancialfirmswillbeintroduced.TogetherwiththeInsolvencyandBankruptcyCode,aresolutionmechanismforfinancialfirmswillensurecomprehensivenessoftheresolutionsysteminourcountry.

AComputerEmergencyResponseTeamforourFinancialSector(CERT‐Fin)willbeestablished.Thisentitywillworkinclosecoordinationwithallfinancialsectorregulatorsandotherstakeholders.

TheGovernmentwillputinplacearevisedmechanismandproceduretoensuretimeboundlistingofidentifiedCPSEsonstockexchanges.Thedisinvestmentpolicyannouncedinthelastbudgetwillcontinue.ThesharesofRailwayPSEslikeIRCTC,IRFCandIRCONwillbelistedinstockexchanges.

Thegovernmenthasproposedtocreateanintegratedpublicsector‘OilMajor’whichwillbeabletomatchtheperformanceofinternationalanddomesticprivatesectoroilandgascompanies.

ThelendingtargetunderthePRADHANMANTRIMUDRAYOJNAhasbeenproposedtobedoubledfrom2015‐16targetandissetatRs.2.44lakhcrore.

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Bankingstocksralliedimmediatelyafterthefinanceministerendedhisbudgetspeech.

ExactitudeAnnotations:UnionBudget2017hasofferedmorethanexpectedbytheindustry.HugeInfrastructurespending,big push to affordable housing and tax concession on the provision for bad loans were the keyproposalswhichwillbenefittheentirebankingsystem.The recent demonetization scheme has offered significant liquidity to the banking system andsignificantpotentialforriseincreditline.ThebudgethassetasideonlyRs.10,000croreforbankrecapitalization,lowerthantheRs.25,000croreinthepreviousbudget.Asperthebestestimatesavailable,PSUBankswouldneedadditionalcapitalofuptoRs240,000croreby2018tomeettheBaselIIIcapitaladequacynorms,putinplacetoguardagainstarepeatofthesituationfollowingthe2008USfinancialcrisis.The25,000croresoffundsarefarbelowtheactualrequirementoffunds.However,itwillstillprovidesomerelieftothebanks.The recovery of banking sector is now dependent on the Banks Board Bureau (BBB) that willrecommendappointmentofdirectorsinPSBsandadviceonwaysofraisingfundsanddealingwithstressedassets.

2.3. EDUCATION

Union budget2017 hasproposedseveralrevolutionarymeasures toboost thequality ofeducation andextend thereach ofeducation tolarger sectionsof thepopulation.Some of thekey measuresareasbelow:

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A systemofmeasuring annual learning outcomes in our schools. Emphasiswill be given onscienceeducationandflexibilityincurriculumtopromotecreativitythroughlocalinnovativecontent.

AnInnovationFundforSecondaryEducationwillbecreatedtoencouragelocalinnovationforensuringuniversalaccess,genderparityandqualityimprovement.ThiswillincludeICT‐enabledlearningtransformation.Thefocuswillbeon3,479educationallybackwardblocks.

ThegovernmentplanstoreformtheUGC.Goodqualityinstitutionswouldbeenabledtohavegreater administrative and academic autonomy. Colleges will be identified based onaccreditationandranking,andgivenautonomousstatus.Arevised frameworkwillbeput inplaceforoutcome‐basedaccreditationandcredit‐basedprogrammes.

Byleveraginginformationtechnology,thegovernmentwill launchSWAYAMplatformwithatleast350onlinecourses.Thiswouldenablestudentstovirtuallyattendthecoursestaughtbythebestfaculty;accesshigh‐qualityreadingresources;participateindiscussionforums;taketestsandearnacademicgrades.Access toSWAYAMwouldbewidenedby linkagewithDTHchannels,dedicatedtoeducation.

ANationalTestingAgencywill be established as an autonomous and self‐sustainedpremiertestingorganizationtoconductallentranceexaminationsforhighereducationinstitutions.Thiswould free CBSE, AICTE and other premier institutions from these administrativeresponsibilitiessothattheycanfocusmoreonacademics.

ExactitudeAnnotations:Theunionbudget2017hastriedtobringsomemajorreformstotheeducationsystem.However,thesereformsareforthehighereducationonlyanddoesnotfindplaceforprimaryeducation.Thegovernmentshouldhavebroughtmoreinclusivepoliciestoboosttheprimaryeducationinacountry like Indiawheremajorchunkofpopulationarebased in ruralwhich lacks thebetterschoolandbetterteachers.In the view of above, the budget will benefit only a select few children in higher education,deprivingmillionsofchildrenfromtheiruniversalrightstoeducation.

2.4. DIGITALECONOMY

Promotion of a digital economy is an integral part ofGovernment’sstrategytocleanthesystemandweedoutcorruption and black money. It has a transformativeimpactintermsofgreaterformalizationoftheeconomyandmainstreamingof financialsavings into thebankingsystem. This, in turn, is expected to energies privateinvestment in the country through lower cost of credit.Indiaisnowonthecuspofamassivedigitalrevolution.Ashifttodigitalpaymentshashugebenefitsforthecommonman.

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The BHIM app has been launched. It will unleash the power of mobile phones for digitalpaymentsandfinancialinclusion.TheGovernmentwilllaunchtwonewschemestopromotetheusageofBHIM; theseare,ReferralBonusScheme for individualsandaCashbackScheme formerchants.

AadharPay,amerchantversionofAadharEnabledPaymentSystem,willbelaunchedshortly.Bankshavetargetedtointroduceadditional10lakhnewPoSterminalsbyMarch2017.Theywillbeencouragedtointroduce20lakhAadharbasedPoSbySeptember2017.

Increased digital transactions will enable small and micro enterprises to access formal credit.Governmentwill encourageSIDBI to refinancecredit institutionswhichprovideunsecured loans,atreasonableinterestrates,toborrowersbasedontheirtransactionhistory.

ExactitudeAnnotations:In the current budget, the underlying theme of the government has been the digitization ofeconomy,bringingdownthecashtoGDPratioandgreaterfinancialinclusion.Thegovernmentseekstocreateanew‘normal’whereintheGDPwouldbebigger,cleanerandreal.ThisexerciseispartofourGovernment’sresolvetoeliminatecorruptionandblackmoney.Thefocusonthedigitizationofeconomyandfinancialinclusionofthemarginalizedisalsocommendable.

2.5. INFRASTRUCTURE

The infrastructure is one of the top priority sector under the union budget. A huge push in theinfrastructurespendingwillboosttheruraldemandandcreatetheemploymentopportunitiesforlarger

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sectionsofthesociety.Eventheinternationalcommunityhaspraisedthehugeallocationtowardsinfraspendswhichwillspurtheruraldemandandconsumptioninthemediumterm.

We have discussed many budget proposals relating to Infra in Section 1.1 (c). Some of the otherproposalsareasbelow:

In the road sector, the governmenthas steppedup theBudget allocation forhighways fromRs.57,976croreinBE2016‐17toRs.64,900croresin2017‐18.2,000kmsofcoastalconnectivityroadshavebeenidentifiedforconstructionanddevelopment.Thiswillfacilitatebetterconnectivitywithportsandremotevillages.Thetotallengthofroads,includingthoseunderPMGSY,builtfrom2014‐15tillthecurrentyearisabout140,000kmswhichissignificantlyhigherthanpreviousthreeyears.

Aspecificprogrammefordevelopmentofmulti‐modallogisticsparks,togetherwithmultimodaltransportfacilities,willbedrawnupandimplemented.

AnewandrestructuredCentralscheme,namely,TradeInfrastructureforExportScheme(TIES)willbelaunchedin2017‐18withanaimtomakeourexportinfrastructureofinternationalstandards.

ExactitudeAnnotations:AtotalallocationforinfrastructuredevelopmentamountingtoRs.396,135croresissignificantspend and may spur huge growth opportunities employment and rural consumption. Fortransportationsectorasawhole,includingrail,roads,shipping,theGovernmenthasprovidedRs.241,387croresin2017‐18.Thismagnitudeofinvestmentwillspurahugeamountofeconomicactivityacrossthecountryandcreatemorejobopportunities.Thepresentationofrailbudgetaspartofthegeneralbudgetisawelcomemove.Itbringsmoreaccountabilityandisinapositiontosynergizetheinvestmentinrailways,road,waterwaysandcivilaviation.

3. TAXPROPOSALS

3.1. DIRECTTAXPROPOSALS

A. RatesofIncomeTax TaxratefortheslabRs.2.5lakhtoRs.5lakhhasbeenreducedfrom10%to5%. Existing rebateofRs5,000 for taxpayershaving taxable incomeofup toRs5 lakhhasbeen

reducedtoRs2,500andonlyfortaxpayershavingtaxableincomeofuptoRs3.5lakh. Surchargeof10%hasbeenintroducedforTaxpayerhavingtaxableincomeofRs.50lakhto1

crore.

B. AdditionalResourceMobilization Withaviewtoensurehorizontalequityamongallcategoriesoftaxpayersderivingincomefrom

dividend,itisproposedtoamendsection115BBDAsoastoprovidethattheprovisionsofsaidsectionshallbeapplicabletoallresidentassesseesexceptdomesticcompanyandcertainfunds,trusts,institutions,etc.

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Inordertowidenthescopeoftaxdeductionatsource,itisproposedtoinsertanewsection194‐IBintheActtoprovidethatIndividualsoraHUF(otherthanthosecoveredunder44ABoftheAct),responsibleforpayingtoaresidentanyincomebywayofrentexceedingfiftythousandrupeesforamonthorpartofmonthduringthepreviousyear,shalldeductanamountequaltofivepercentofsuchincomeasincome‐taxthereon.

C. MeasuresforPromotingAffordableHousingandRealEstateSector Withaviewtopromotethereal‐estatesectorandtomakeitmoreattractiveforinvestment,it

isproposedtoamendsection2(42A)oftheActsoastoreducetheperiodofholdingfromtheexisting36monthsto24monthsincaseofimmovableproperty,beinglandorbuildingorboth,toqualifyaslongtermcapitalasset.

Inorder topromote thedevelopment of affordablehousingsector, it isproposed toamendsection80‐IBAsoastoprovidethefollowingrelaxations:—

a. Thesizeofresidentialunitshallbemeasuredbytakingintoaccountthe"carpetarea"asdefinedinRealEstate(RegulationandDevelopment)Act,2016andnotthe"built‐uparea".

b. Therestrictionof30squaremetersonthesizeofresidentialunitsshallnotapplytotheplacelocatedwithinadistanceof25kmsfromthemunicipallimitsoftheChennai,Delhi,KolkataorMumbai.

c. Theconditionofperiodofcompletionofprojectforclaimingdeductionunderthissectionshallbeincreasedfromexistingthreeyearstofiveyears.

CertainTaxincentivehasbeenintroducedforthedevelopmentofcapitalofAndhraPradesh

Special provisions has been inserted for computation of capital gains in case of jointdevelopmentagreement:

ShiftingofBaseyear:Section55oftheActhasbeenamendedsoastoprovidethatthecostofacquisitionofanassetacquiredbeforeApril1,2001shallbeallowedtobetakenasfairmarketvalueasonApril1,2001andthecostofimprovementshallincludeonlythosecapitalexpenseswhichareincurredafterApril1,2001

Section54EChasbeenamendedsoastoprovidethatinvestmentinanybondredeemableafterthree years which has been notified by the Central Government in this behalf shall also beeligibleforexemption..

Wherethehousepropertyconsistingofanybuildingandlandappurtenanttheretoisheldasstock‐in‐tradeandthepropertyoranypartofthepropertyisnotletduringthewholeoranypartofthepreviousyear,theannualvalueofsuchpropertyorpartoftheproperty,fortheperiodupto one year from the end of the financial year in which the certificate of completion ofconstructionofthepropertyisobtainedfromthecompetentauthority,shallbetakentobenil.

D. MeasuresforStimulatingGrowth

ExtensionofeligibleperiodofconcessionaltaxrateoninterestincaseofExternalCommercialBorrowingandExtensionofbenefittoRupeeDenominatedBonds.

Eligibleperiodofconcessionaltaxrateundersection194LDhasbeenextended

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Carryforwardandsetoffoflossincaseofstart‐upcompanies:InordertofacilitateeaseofdoingbusinessandtopromotestartupIndia,itisproposedtoamendsection79oftheActtoprovidethatwhereachangeinshareholdinghastakenplaceinapreviousyearinthecaseofaprivatecompany,andbeinganeligiblestart‐up,lossshallbecarriedforwardandsetoffagainsttheincomeofthepreviousyearwithcertainconditions.

Theperiodforclaimingdeductionbystart‐upshasbeenextendedfromfiveyearstosevenyears.

TaxcreditforMinimumAlternateTaxandAlternateMinimumTaxshallnotbeallowedtobecarriedforwardtosubsequentyeartotheextentsuchcreditrelatestothedifferencebetweentheamountofforeigntaxcredit(FTC)allowedagainstMAT/AMTandFTCallowableagainstthetaxcomputedunderregularprovisionsofActotherthantheprovisionsrelatingtoMAT/AMT.

Scopeofsection43DtoCo‐operativeBankshasbeenextended

Deductionlimitinrespectofprovisionforbadanddoubtfuldebtshasbeenextendedto8.5%ofthetotalincome.

E. PromotingDigitalEconomy

Section80Ghasbeenamendedsoastoprovidethatnodeductionshallbeallowedunderthesection80Ginrespectofdonationofanysumexceedingtwothousandrupeesunlesssuchsumispaidbyanymodeotherthancash.

where an assessee incurs any expenditure for acquisition of any asset in respect which apaymentoraggregateofpaymentsmadetoaperson inaday,otherwise thanbyanaccountpayeechequedrawnonabankoraccountpayeebankdraftoruseofelectronicclearingsystemthroughabankaccount,exceedstenthousandrupees,suchexpenditureshallbeignoredforthepurposesofdeterminationofactualcostofsuchasset.

Inordertodis‐incentivizecashtransactions,itisproposedtoamendtheprovisionofsection40AoftheActtoprovidethefollowing:

a. ToreducetheexistingthresholdofcashpaymenttoapersonfromRs.20,000toRs.10,000;

b. Deeming a payment as profits and gains of business of profession if the expenditure isincurredinaparticularyearbutthecashpaymentismadeinanysubsequentyearofasumexceedingtenthousandrupeestoapersoninasingleday;and

c. Furtherexpandthespecifiedmodeofpaymentunderrespectivesub‐sectionofsection40Afromanaccountpayeechequedrawnonabankoraccountpayeebankdrafttobyanaccountpayeechequedrawnonabankoraccountpayeebankdraftoruseofelectronicclearingsystemthroughabankaccount.

Existingrateofdeemedtotalincomeofeightpercenthasbeenreducedtosixpercentinrespectoftheamountofsuchtotalturnoverorgrossreceiptsreceivedbyanaccountpayeechequeoraccountpayeebankdraftoruseofelectronicclearingsystemthroughabankaccount.

Section269SThasbeeninsertedintheActtoprovidethatnopersonshallreceiveanamountofthreelakhrupeesormore,—

i. inaggregatefromapersoninaday;

ii. inrespectofasingletransaction;or

iii. inrespectoftransactionsrelatingtooneeventoroccasionfromaperson,

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otherwisethanbyanaccountpayeechequeoraccountpayeebankdraftoruseofelectronicclearingsystemthroughabankaccount.

F. TransparencyinElectoralFunding

Inordertodiscouragethecashtransactionsandtobringtransparencyinthesourceoffundingtopolitical parties, it is proposed to amend the provisions of section 13A to provide for additionalconditionsforavailingthebenefitofthesaidsectionwhichareasunder:

a. NodonationsofRs.2,000ormoreisreceivedotherwisethanbyanaccountpayeechequedrawnonabankoranaccountpayeebankdraftoruseofelectronicclearingsystemthroughabankaccountorthroughelectoralbonds,

b. Politicalpartyfurnishesareturnofincomeforthepreviousyearinaccordancewiththeprovisionsofsub‐section(4B)ofsection139onorbeforetheduedateundersection139.

G. EaseofdoingBusiness

Section9hasbeenamendedsoastoclarifythattheExplanation5shallnotapplytoanyassetorcapitalassetmentionedthereinbeinginvestmentheldbynon‐resident,directlyorindirectly,inaForeign Institutional Investor, as these entities are regulated and broad based. The proposedamendmentisclarificatoryinnature.

Conditionsofspecialtaxationregimeforoffshorefundsundersection9Ahasbeenmodified.

IncomeofForeignCompanyfromsaleofleftoverstockofcrudeoilfromstrategicreservesattheexpiryofagreementorarrangementhasbeenexempted.

EnablingofFilingofForm15G/15H(self‐declaration) forcommissionpaymentsspecifiedundersection194D

ThethresholdlimitofincomeandsalesturnoverformaintenanceofbooksofaccountsincaseofIndividualsandHinduundividedfamilyunderSection44AAhasbeenincreasedfromRs.120,000toRs.250,000andfromRs.1,000,000toRs.2,500,000.

Personswhodeclaresprofitforthepreviousyearinaccordancewiththeprovisionsofsub‐section(1) of section 44AD and his total sales, total turnover or gross receipts, as the casemay be, inbusinessdoesnotexceedtwocrorerupeesinsuchpreviousyear,areexcludedfromrequirementofauditofbooksofaccountsundersection44AB.

Section194Jhasbeenamendedtoreducetherateofdeductionoftaxatsourcetotwopercentfromtenpercent,incaseofpaymentsreceivedorcreditedtoapayee,beingapersonengagedonlyinthebusinessofoperationofcallcenter.

Expenditureinrespectofwhichpaymenthasbeenmadebytheassesseetoapersonreferredtoinundersection40A(2)(b)aretobeexcludedfromthescopeofsection92BAoftheAct

Wherethetotal incomeoftheassesseeincludesanyincomefromtransferofcarboncredit,suchincomeshallbetaxableattheconcessionalrateoftenpercent(plusapplicablesurchargeandcess)onthegrossamountofsuchincome.NoexpenditureorallowanceinrespectofsuchincomeshallbeallowedundertheAct.

The assessee who declares profits and gains in accordance with presumptive taxation regimeprovidedundersection44ADAshallalsobeliabletopayadvancetaxinoneinstalmentonorbeforethe15thofMarch.

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ExtensionofcapitalgainexemptiontoRupeeDenominatedBonds.

Fortheassessmentyear2018‐19,thetimelimitformakinganassessmentorderundersections143or144shallbereducedfromexistingtwenty‐onemonthstoeighteenmonthsfromtheendoftheassessmentyear,and fortheassessmentyear2019‐20andonwards, thesaidtime limitshallbetwelve months from the end of the assessment year in which the incomewas first assessable.Furthersuchrationalizationhasbeenproposedincaseofvariousotherassessmentcases.

H. Anti‐abuseMeasures

ExemptionunderSection10(38)forincomearisingontransferofequityshareacquiredoronafter1stdayofOctober,2004shallbeavailableonlyiftheacquisitionofshareischargeabletoSecuritiesTransactions Tax under Chapter VII of the Finance (No 2) Act, 2004. However, to protect theexemptionforgenuinecaseswheretheSecuritiesTransactionsTaxcouldnothavebeenpaidlikeacquisitionofshareinIPO,FPO,bonusorrightissuebyalistedcompanyacquisitionbynon‐residentinaccordancewithFDIpolicyoftheGovernmentetc.,itisalsoproposedtonotifytransfersforwhichtheconditionofchargeabilitytoSecuritiesTransactionsTaxonacquisitionshallnotbeapplicable.

Anewsection50CAhasbeeninsertedtoprovidethatwhereconsiderationfortransferofshareofacompany (other than quoted share) is less than the Fair Market Value (FMV) of such sharedeterminedinaccordancewiththeprescribedmanner,theFMVshallbedeemedtobethefullvalueofconsiderationforthepurposesofcomputingincomeunderthehead"Capitalgains".

ScopeofSection56hasbeenwidenedtotaxreceiptofmoneyexceedingRs.50,000whichiswithoutinadequateconsideration.

Inordertoensurethatreturnisfiledwithinduedate,itisproposedtoinsertanewsection234FintheActtoprovidethata feefordelayinfurnishingofreturnshallbe leviedforassessmentyear2018‐19andonwardsinacasewherethereturnisnotfiledwithintheduedatesspecifiedforfilingofreturnundersub‐section(1)ofsection139.Theproposedfeestructureisasfollows:—

a. afeeoffivethousandrupeesshallbepayable,ifthereturnisfurnishedaftertheduedatebutonorbeforethe31stdayofDecemberoftheassessmentyear;

b. afeeoftenthousandrupeesshallbepayableinanyothercase.

However,inacasewherethetotalincomedoesnotexceedfivelakhrupees,itisproposedthatthefeeamountshallnotexceedonethousandrupees.

Inordertoensurethatthepersonfurnishingreportorcertificateundertakesduediligencebeforemaking suchcertification, it isproposed to insert anewsection271J soas toprovide that if anaccountantoramerchantbankeroraregisteredvaluer,furnishesincorrectinformationinareportorcertificateunderanyprovisionsoftheActortherulesmadethereunder,theAssessingOfficerortheCommissioner (Appeals)maydirecthimtopayasumof tenthousandrupees foreachsuchreportorcertificatebywayofpenalty.

I. RationalizationMeasures

Section115JBisamendedsoastoprovidetheframeworkforcomputationofbookprofitforIndAScompliantcompaniesintheyearofadoptionandthereafter. Themainfeaturesofthisproposedframeworkhasbeenguidedinthebudget.

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Various rationalization of provisions have been proposed in view of applicability of Ind AS onvariousentities.

Section71oftheActrelatestoset‐offoflossfromoneheadagainstincomefromanother.Inlinewiththeinternationalbestpracticesitisproposedtoinsertsub‐section(3A)inthesaidsectiontoprovidethatset‐offoflossunderthehead"Incomefromhouseproperty"againstanyotherheadofincomeshallberestrictedtotwolakhrupeesforanyassessmentyear.However,theunabsorbedlossshallbeallowedtobecarriedforwardforset‐offinsubsequentyearsinaccordancewiththeexistingprovisionsoftheAct.

Explanation to sub‐section (1) and to sub‐section (1A) of section 132 and to sub‐section (1) ofsection132Ahasbeeninsertedtodeclarethatthe'reasontobelieve'or'reasontosuspect',asthecasemaybe,shallnotbedisclosedtoanypersonoranyauthorityortheAppellateTribunal.

ItisproposedtowidenthescopeoftheSection133Abyamendingsub‐section(1)toincludeanyplace,atwhichanactivityforcharitablepurposeiscarriedon.

J. BenefitforNPSsubscribers

InordertoprovidefurtherrelieftoanemployeesubscriberofNPS,itisproposedtoamendthesection10soastoprovideexemptiontopartialwithdrawalnotexceeding25%ofthecontributionmadebyanemployeeinaccordancewiththetermsandconditionsspecifiedunderPensionFundRegulatoryandDevelopmentAuthorityAct,2013andregulationsmadethereunder.

3.2. INDIRECTTAXPROPOSALS

3.2.1 GeneralamendmentsapplicableforServiceTax,ExciseDutyandCustomDutyActs

ApplicationfeeforseekingadvancerulingfromisincreasedfromRs.2,500toRs.10,000.

Existingtimelimitofpronouncementofadvancerulingbytheauthorityisextendedfrom90daysto6months.

Definition of “Authority” substituted to mean the Authority for Advance Ruling asconstitutedundersection245‐OoftheIncome‐taxAct,1961.

Vacancies (in the Authority for advance ruling) not to invalidate proceedings is beingomitted.

3.2.2 ServiceTax

3.2.2.1 AmendmenteffectivewitheffectfromFebruary2,2017

Amendment in Mega Exemption Notification No. 25/2012 ST dated June 20, 2012:Services by the Army, Naval and Air Force Group Insurance Funds by way of lifeinsurancetoitsexemptedfromservicetax

UndertheRegionalConnectivityScheme(RCS),exemptionfromservicetaxisprovidedinrespectoftheamountofviabilitygapfunding(VGF)payabletotheselectedairlineoperatorforselectedservicesforaperiodof1yearfromthedateofcommencement.

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CertainServicesprovidedbyIndianInstitutesofManagement(IIMs)isexempted.

3.2.2.2 AmendmenteffectivewitheffectfromthedateofenactmentofFinanceBill2017

Servicesbywayofcarryingoutanyprocessamountingtomanufactureorproductionofgoods excluding alcoholic liquor for human consumption” is proposed to be omittedfromthenegativelist.

Research and Development (R & D) Cess Act, 1986 to be repealed. Consequently,exemptionfromservicetaxequivalenttotheamountofR&DcesspayableontheimportoftechnologyunderthesaidActwouldnotbeavailablewithrespecttoataxableserviceinvolvingimportoftechnology.

Serviceportioninexecutionofworkscontractinvolvingtransferofgoodsandlandorundividedshareofland,asthecasemaybe,shallnotincludevalueofpropertyinsuchlandorundividedshareofland.

TransferringthependingapplicationsbeforetheAuthorityforAdvanceRulings(CentralExcise,CustomsandServiceTax)totheAuthorityconstitutedundersection245‐OoftheIncome‐taxActfromthestageatwhichsuchproceedingsstoodhasbeenprovided.

3.2.2.3 RetrospectiveExemptions

Onetimeupfrontamountpayableforgrantoflong‐termleaseofindustrialplotsbyStateGovernmentindustrialdevelopmentcorporations/undertakingstoindustrialunits.

3.2.3 ExciseDuty

3.2.3.1 AmendmenteffectivewitheffectfromFebruary2,2017

Atimelimitofthreemonthshasbeenprovided[furtherextendableby6months] forgrantingremissionofdutyfromthereceiptofapplicationincasethegoodsislost.

Time limit of threemonths [further extendable by 6months] has been provided forapprovalofrequestsregardingtransferofCENVATcreditonshifting,sale,merger,etc.ofthefactory.

Banks and financial institutions engaged in providing services by way of extendingdeposits,loansoradvanceshasbeenexcludedfromitsambitofCenvatCreditRules.

3.2.4 CustomDuty

Section 17 of the Customs Act, 1962 is proposed to be amended to rationalize therequirementofdocumentsforverificationofself‐assessment.

Section27(2)oftheCustomsAct,1962tobeamendedsoastokeepoutsidetheambitofunjustenrichment, therefundofdutypaidinexcessbytheimporterbeforeanorderpermittingclearanceofgoodsforhomeconsumptionismade,where‐ suchexcesspaymentisevidentfromthebillofentryinthecaseofself‐assessedbill

ofentryor thedutyactuallypayableisreflectedinthereassessedbillofentryinthecaseof

reassessment. Mannerofpaymentofdutyandinterestthereonhasbeenamendedinthecaseofself‐

assessedbillsofentry.

Page 29 of 37

.

ANNEXUREI:CHANGESININDIRECTTAXES

Sl.No. Changes Existing ProposedI ChangesinTaxBaseofServiceTax 1 Rule2AofServiceTax(DeterminationofValue)Rules,2006

isbeingamendedwitheffectfrom01.07.2010soastomakeit clear that value of service portion in execution ofworkscontract involving transfer of goods and land or undividedshareof land,asthecasemaybe,shallnot includevalueofpropertyinsuchlandorundividedshareofland.

4,.2% 4,.2%

2 The Negative List entry in respect of “services by way ofcarrying out any process amounting to manufacture orproduction of goods excluding alcoholic liquor for humanconsumption”,isproposedtobeomitted.However,thesameentryisbeingplacedinexemptionnotificationNo.25/2012‐Service Tax dated 20th June, 2012. Consequently, thedefinitionof‘processamountingtomanufacture’[clause(40)section65B]isalsoproposedtobeomittedfromtheFinanceAct,1994andisbeingincorporatedinthegeneralexemptionnotification

Nil Nil

3 Servicetaxexemptiontotaxableservicesprovidedoragreedto be provided by the Army, Naval and Air Force GroupInsuranceFundsbywayoflifeinsurancetomembersoftheArmy, Navy and Air Force under the Group InsuranceSchemesoftheCentralGovernment,isbeingmadeeffectivefrom10thdayofSeptember,2004,thedatewhenservicesoflifeinsurancebecametaxable

14% Nil

Actual Budget Revised Budget2015-2016 2016-2017 2016-2017 2017-2018

Customs Duties-Import Duty 2,03,074.88 2,23,204.00 2,09,950.00 2,38,200.00 Exporty Duty 7,263.12 6,796.00 7,050.00 6,800.00 Union Excise Duties 2,88,072.89 3,18,669.50 3,87,368.58 4,06,900.00 Service Tax 2,11,414.25 2,31,000.00 2,47,500.00 2,75,000.00 Taxes on union territories 3,878.26 4,121.08 4,277.16 4,679.46 Total Indirect Tax Revenue 7,13,703.40 7,83,790.58 8,56,145.74 9,31,579.46

Head of taxes

Page 30 of 37

Sl.No. Changes Existing Proposed4 BenefitoftheexemptionnotificationNo.41/2016‐STdated

22.09.2016isbeingextendedwitheffect from1.6.2007,thedate when the services of renting of immovable propertybecame taxable. Notification No.41/2016‐ST dated22.09.2016, exempts one time upfront amount (called aspremium, salami, cost, price, development charges or bywhatever name) payable for grant of long‐term lease ofindustrial plots (30 years or more) by State Governmenti d t i l d l t

14% Nil

5 Services provided or agreed to be provided by the Army,Naval and Air Force Group Insurance Funds byway of lifeinsurancetomembersoftheArmy,NavyandAirForceundertheGroup InsuranceSchemesof theCentralGovernment isbeingexemptedfromservicetaxfrom2ndFebruary,2017.

14% Nil

6 TheexemptionvideS.No.9BofnotificationNo.25/2012‐STdated20.06.2012, isbeingamendedsoastoomittheword“residential” appearing in the notification. The exemptionremainsthesameinallotherrespects.S.No.9BofnotificationNo. 25/2012‐ST exempts services provided by IndianInstitutesofManagement(IIMs)bywayoftwoyearfulltimeresidentialPostGraduateProgrammes(PGP)inManagementfor the Post Graduate Diploma in Management (PGDM), towhich admissions are made on the basis of the CommonAdmissionTest(CAT),conductedbyIIM.

14% Nil

7 Under the Regional Connectivity Scheme (RCS), exemptionfromservicetaxisbeingprovidedinrespectoftheamountofviability gap funding (VGF) payable to the selected airlineoperatorfortheservicesoftransportofpassengers,withorwithoutaccompaniedbelongings,byair,embarkingfromorterminatinginaRegionalConnectivityScheme(RCS)airport,foraperiodofoneyearfromthedateofcommencementofoperationsoftheRegionalConnectivityScheme(RCS)airportasnotifiedbyMinistryofCivilAviation.

14% Nil

II AmendmentInvolvingchangeintherateofAdditionalExciseDuty

Existing Proposed

1 TobaccoandTobaccoProducts

A. Non‐filterCigarettesoflengthnotexceeding65mm Rs.215perthousand

Rs. 311 perthousand

B. Non‐filterCigarettesof lengthexceeding65mmbutnotexceeding70mm

Rs.370perthousand

Rs.541perthousand

C. FilterCigarettesoflengthnotexceeding65mm Rs.215perthousand

Rs.311perthousand

D. Filter Cigarettes of length exceeding 65mm but notexceeding70mm

Rs.260perthousand

Rs.386perthousand

E. Filter Cigarettes of length exceeding 70mm but notexceeding75mm

Rs.370perthousand

Rs.541perthousand

Page 31 of 37

Sl.No. Changes Existing Proposed F. OtherCigarettes Rs.560per

thousandRs.811perthousand

G. Chewingtobacco(includingfilterkhaini) 10% 12%

H. Jardascentedtobacco 10% 12%

I. PanMasalacontainingTobacco(Gutkha) 10% 12%

J. PanMasala 6% 9%

K. UnmanufacturedTobacco 4.2% 8.3%

III AmendmentInvolvingchangeintherateofBasicExciseDuty

1 TobaccoandTobaccoProducts

A. Cigarandcheroots 12.5%orRs.3755perthousand,whicheverishigher

12.5%orRs.4006perthousand,whicheverishigher

B. Cigarillos 12.5%orRs.3755perthousand,whicheverishigher

12.5%orRs.4006perthousand,whicheverishigher

C. Cigarettesoftobaccosubstitutes Rs.3755perthousand

Rs.4006perthousand

D. Cigarillosoftobaccosubstitutes 12.5%orRs.3755perthousand,whicheverishigher

12.5%orRs.4006perthousand,whicheverishigher

E. Othersoftobaccosubstitutes 12.5%orRs.3755perthousand,whicheverishigher

12.5%orRs.4006perthousand,whicheverishigher

F. Paperrolledbiris–handmade Rs.21perthousand

Rs.28perthousand

G. Paperrolledbiris–machinemade Rs.21perthousand

Rs.78perthousand

2 RenewableEnergy

Page 32 of 37

Sl.No. Changes Existing Proposed Solar tempered glass for use in solar photovoltaic

cells/modules,solarpowergeneratingequipmentorsystems,flatplatesolarcollector,solarphotovoltaicmoduleandpanelforwaterpumpingandotherapplications,subject toactualusercondition

Nil 6%

Parts/rawmaterialsformanufactureofsolartemperedglassfor use in solar photovoltaic cells/modules, solar powergenerating equipment or systems, flat plate solar collector,solarphotovoltaicmoduleandpanelforwaterpumpingandotherapplications,subjecttoactualusercondition

12.5% 6%

Resin and catalyst formanufacture of cast components forWindOperatedEnergyGenerators[WOEG],subjecttoactualusercondition

12.5% Nil

All items of machinery required for fuel cell based powergenerating systems to be set up in the country or fordemonstrationpurposes

12.5% 6%

All items of machinery required for balance of systemsoperatingonbiogas/bio‐methane/by‐producthydrogen

12.5% 6%

3 Miscellaneous MembraneSheetandTricot/Spacerforuseinmanufacture

ofROmembraneelementforhouseholdtypefilters,subjecttoactualusercondition

12.5% 6%

AllpartsformanufactureofLEDlightsorfixtures,includingLEDlamps,subjecttoactualusercondition

ApplicableDuty

6%

Miniaturized POS card reader for m‐POS (not includingmobile phones, or tablet computers), micro ATM as perstandardsversion1.5.1,FingerPrintReader/ScannerorIrisScanner

ApplicableDuty

Nil

PartsandcomponentsformanufactureofminiaturizedPOScardreader for m‐POS (not including mobile phones, or tabletcomputers),microATMasperstandardsversion1.5.1,FingerPrintReader/ScannerorIrisScanner,subjecttoactualusercondition

ApplicableDuty

Nil

a. WasteandscrapofpreciousmetalsormetalscladwithpreciousmetalsarisingincourseofmanufactureofgoodsfallinginChapter71

b. Strips,wires,sheets,platesandfoilsofsilverc. Articlesofsilverjewellery,otherthanthosestuddedwith

diamond,ruby,emeraldorsapphired. Silver coin of purity 99.9%and above, bearing a brand

namewhenmanufacturedfromsilveron

Nil Nil, subjectto theconditionthat nocredit ofdutypaidoninputs orinputservices orcapital

Page 33 of 37

Sl.No. Changes Existing Proposedgoods hasbeen availedbymanufactureof suchgoods

IV AMENDMENTSINTHECENTRALEXCISERULES,2002ANDTHECENVATCREDITRULES,2004

Sub‐rule (2) is being inserted in rule 21 of Central ExciseRules,2002soastoprovideforatimelimitofthreemonths[further extendableby6months] for granting remissionofdutyunderthesaidrule21readwithsection5oftheCentralExciseAct,1944.

Sub‐rule (4) is being inserted in rule 10 of CENVAT CreditRules,2004soastoprovideforatimelimitofthreemonths[further extendable by 6months] for approval of requestsregardingtransferofCENVATcreditonshifting,sale,merger,etc.ofthefactory.

V RetrospectiveAmendments inExcise

To retrospectively [that is with effect from 01.01.2017]specifyatariffrateofexcisedutyof12.5%[asagainstpresenttariff rateof27%]onmotorvehicles for transportofmorethan13personsfallingundertariffitems87029021to87029029of theFirstSchedule to theCentralExciseTariffAct,1985.

27% 12.5%

VI PROPOSALSINVOLVINGCHANGESINBCD,CVD,SADANDEXPORTDUTYRATES

Existing Proposed

1 OresandConcentrates Otheraluminiumores,includinglaterite ExportDuty

‐NilExportDuty–15%

2 MineralfuelsandMineraloils LiquefiedNaturalGas BCD–5% BCD– 2.5%3 Chemicals&Petrochemicals

o‐Xylene BCD–2.5% BCD– Nil Medium Quality Terephthalic Acid (MTA) & Qualified

TerephthalicAcid(QTA)BCD–7.5% BCD– 5%

2‐EthylAnthraquinone[29146990]foruseinmanufactureofhydrogenperoxide,subjecttoactualusercondition

BCD–7.5% BCD– 2.5%

Clay 2 Powder (Alumax) for use in ceramic substrate forcatalyticconvertors,subjecttoactualusercondition

BCD–7.5% BCD– 5%

VinylPolyethyleneGlycol (VPEG) foruse inmanufactureofPolyCarboxylateEther,subjecttoactualusercondition

BCD–10% BCD– 7.5%

4 Textiles

Page 34 of 37

Sl.No. Changes Existing ProposedNylonmonofilamentyarnforuseinmonofilamentlonglinesystem for Tuna fishing, subject to certain specifiedconditions

BCD–7.5% BCD– 5%

5 FinishedLeather,FootwearandOtherLeatherProducts

Vegetabletanningextracts,namelyWattleextractandMyrobalanfruitextract

BCD–7.5% BCD– 2.5%

Limitofdutyfreeimportofeligibleitemsformanufactureofleather footwear or synthetic footwear or other leatherproductsforuseinthemanufactureofsaidgoodsforexport

3%ofFOBvalueofsaidgoods

exportedduringthe

precedingfinancialyear

5%ofFOBvalueofsaidgoods

exportedduringthe

precedingfinancialyear

6 Metals

Co‐polymer coated MS tapes / stainless steel tapes formanufacture of telecommunication grade optical fibres oropticalfibrecables,subjecttoactualusercondition

BCD–Nil BCD– 10%

Nickel BCD–2.5% BCD– Nil

MgO coated cold rolled steel coils [7225 19 90] for use inmanufactureofCRGOsteel,subjecttoactualusercondition

BCD–10% BCD– 5%

Hot Rolled Coils [7208], when imported for use inmanufactureofweldedtubesandpipesfallingunderheading7305or7306,subjecttoactualusercondition

BCD–12.5% BCD– 10%

7 Capital Goods

Ballscrews,linearmotionguidesandCNCsystemsforuseinmanufactureofallCNCmachinetools,subjecttoactualusercondition

Ball screwsand linermotionguidesBCD–7.5% CNCsystemsBCD–10%

BCD– 2.5%

8 Electronics/Hardware PopulatedPrintedCircuitBoards(PCBs)forthemanufacture

ofmobilephones,subjecttoactualuserconditionSAD–Nil SAD– 2%

9 RenewableEnergy Solar tempered glass for use in the manufacture of solar

cells/panels/modulessubjecttoactualuserconditionBCD–5% BCD– Nil

Page 35 of 37

Sl.No. Changes Existing Proposed Parts/rawmaterialsformanufactureofsolartemperedglass

for use in solar photovoltaic cells/modules, solar powergenerating equipment or systems, flat plate solar collector,solarphotovoltaicmoduleandpanelforwaterpumpingandotherapplications,subjecttoactualusercondition

CVD–12.5%

CVD– 6%

Resin and catalyst formanufacture of cast components forWindOperatedEnergyGenerators[WOEG],subjecttoactualusercondition

BCD–7.5%CVD–12.5%

BCD– 5%CVD–NilSAD–Nil

All items of machinery required for fuel cell based powergenerating systems to be set up in the country or fordemonstration purposes, subject to certain specifiedconditions

BCD–10%/7.5%CVD–12.5%

BCD– 5%CVD–6%

All items of machinery required for balance of systemsoperating on biogas/ bio‐methane/ by‐product hydrogen,subjecttocertainspecifiedconditions

BCD–10%/7.5%CVD–12.5%

BCD– 5%CVD–6%

10 Commodity Cashewnut,roasted,saltedorroastedandsalted BCD–30% BCD– 45% ROmembraneelementforhouseholdtypefilters BCD–7.5% BCD– 10%11 Miscellaneous MembraneSheetandTricot/Spacerfor useinmanufacture

ofROmembraneelementforhouseholdtypefilters,subjecttoactualusercondition

CVD–12.5%

CVD– 6%

AllpartsformanufactureofLEDlightsorfixtures,includingLEDlamps,subjecttoactualusercondition

ApplicableBCD,CVD

BCD– 5%CVD–6%

All inputs for use in the manufacture of LED Driver andMCPCB for LED lights or fixtures, including LED lamps,subjecttoactualusercondition

ApplicableBCD

5%

De‐minimis customs duties exemption limit for goodsimportedthroughparcels,packetsandletters

DutypayablenotexceedingRs.100perconsignment

CIFvaluenot

exceedingRs.1000perconsignment

Miniaturized POS card reader for m‐POS (not includingmobile phones, or tablet computers), micro ATM as perstandardsversion1.5.1,FingerPrintReader/ScannerorIrisScanner

ApplicableBCD,

CVDSAD

BCD– NilCVD–NilSAD–Nil

Page 36 of 37

Sl.No. Changes Existing Proposed PartsandcomponentsformanufactureofminiaturizedPOS

cardreaderform‐POS(notincludingmobilephones,ortabletcomputers),microATMasperstandardsversion1.5.1,FingerPrintReader/ScannerorIrisScanner,subjecttoactualusercondition

ApplicableBCD,

CVDSAD

BCD– NilCVD–NilSAD–Nil

Silvermedallion,silvercoinshavingsilvercontentnotbelow99.9%,semimanufacturedformofsilverandarticlesofsilver

CVD‐Nil CVD–12.5%

Goods imported for petroleum and coal bed methaneoperations by availing of the benefit of notificationNo.12/2012‐ Customs, dated 17.03.2012 [S. No.357A] nolongerrequiredforthesaidpurposearebeingallowedtobedisposedofonpaymentofapplicablecustomsdutiesorexciseduty,onthedepreciatedvaluecalculatedasperstraightlinemethod(subjecttodepreciatedvaluenotbeinglessthan30%oftheoriginalvalue)ofsuchgoods.

Clause(c)ofsub‐section(3)ofsection9isbeingsubstitutedsoastowithdraw the exemption to three categories of non‐actionablesubsidies specified therein from the scope of anti‐subsidyinvestigations.

Page 37 of 37

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